So as part of the political debate, Obama is talking about changing health insurance, but he is also talking about medical malpractice reform. Some of my fellow trial lawyers are getting stirred up because we don’t think that extending coverage of health care ought to also limit an injured person’s access to justice.

Here are some links which discuss Obama’s comments in the last few days:

Obama Talks Up Liability Reform
Politico
http://www.politico.com/news/stories/0609/23783.html
 
In Pitch to AMA, Obama Paints Mixed Picture
Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2009/06/15/AR2009061501744.html
 
Cost Concerns as Obama Pushes Health Issue
New York Times
http://www.nytimes.com/2009/06/16/health/policy/16obama.html?hpw
 
Obama Calls Cost of Healthcare a Threat to Economy
Chicago Tribune/LA Times
http://www.latimes.com/news/nationworld/washingtondc/la-na-obama-ama16-2009jun16,0,1354461.story
 
I tend to agree with the gist of the Politico article: Obama has to keep all options on the table and speak in terms that ever player in the debate feels are near and dear to their interests.

I think the debate will be rational, and because of that I think that the data which show that very little of the overall cost of health care has anything to do with malpractice lawsuits will not be ignored. There are things that can be done to decrease the cost of lawsuits. Call it reform or not, that’s up to you.

I commonly request that each side to a malpractice suit be limited in the number of expert witnesses who can be used on a certain subject. Almost universally the lawyers for the Doctors will not voluntarily limit the number of expert witnesses. This increases the costs to defend these suits. There is one liability reform I’m fine with implementing.

Chris Nichols

Rebalancing the scales of justice

Barack Obama must stop the supreme court from providing immunity to health insurers and other corporate law-breakers

• by Simon Lazarus and Ian Millhiser
• guardian.co.uk, Thursday November 13 2008 18.00 GMT

Fourteen years ago, a single mother named Ann Dunham began a long, ultimately unsuccessful battle with cancer – and a simultaneous war with her health insurance provider. Over and over, as Ms Dunham’s son, Barack Obama, recounted during the October 6 presidential debate, company representatives suggested that his mother’s cancer “may have been a pre-existing condition and they don’t have to pay her treatment”.

Ann Dunham’s story is hardly unique. Millions of Americans know well that the pain of serious illness is often compounded by endless jousts with insurers arbitrarily withholding coverage of physician-prescribed care. Myriad court records tell the stories of people like Maureen Kurtek, who lost five fingertips and most of her right foot after her husband’s employer switched to an insurer which resisted continuing to cover her lupus treatment. And of construction manager James Lind, who was able to continue working despite his multiple sclerosis, until his insurer abruptly declined to continue paying for the prescription that had kept his MS at bay. And Rhonda Bast, who died after her insurer refused coverage of a bone marrow transplant which could have prevented her cancer from spreading to her brain.

Many of these sad stories could and should have been avoided. The fault lies with senior federal officials driven by the same deregulatory fervour responsible for enabling the imprudent lending frenzy behind the current financial crisis. In this case, however, the zealots do not run administrative agencies or departments. They preside at the United States supreme court. Over the past quarter-century, court majorities, led principally by Justice Antonin Scalia, have systematically dismantled the framework of laws designed to prevent benefit providers from breaking their promises to patients like Ann Dunham.

The keystone of this protective framework is the Employee Retirement Income Security Act, known by its acronym, Erisa. Congress passed Erisa in 1974 to protect the pensions and employer-provided health plans which millions of Americans rely upon. Yet the supreme court has twisted this law into something quite different. As noted by Senate judiciary chairman, Patrick Leahy, the court’s perversion of Erisa is a prime example of decisions that have turned laws “on their heads, making them protections for big business rather than ordinary citizens.”

Erisa sets strict standards to ensure that employers and insurers administering group benefit plans act “solely in the interests of beneficiaries for the exclusive purpose of providing benefits,” not their own bottom-line. But the court has rendered these protections meaningless. In a Catch-22 decision written by Justice Scalia, a 5-4 majority held that, when plan administrators violate their obligations under the law, victims may not recover any monetary compensation for resulting losses they suffer. Adding insult to injury, the court has read Erisa as a warrant for “pre-empting” – ie abolishing – pre-existing state law protections, leaving victims with literally no recourse. Thus, in the words of, the late Justice Byron White, the supreme court has achieved the “perverse anomaly of leaving those Congress set out to protect with less protection than they enjoyed before Erisa was enacted.”

When forced to apply the supreme court’s “tangled” Erisa rules, ordinarily circumspect federal judges have often harshly attacked them. Most famously, the late Chief Judge Edward Becker, a Republican named to the third circuit court of appeals by President Reagan, excoriated Justice Scalia and his allies for converting Erisa “into a shield that insulates HMOs from liability for even the most egregious acts of dereliction committed against plan beneficiaries, a state of affairs directly contrary to the intent of Congress.” Judge Becker stressed that the court’s distortion of Erisa creates “strong incentives for HMOs to deny claims in bad faith or otherwise ‘stiff’ participants.” The systemic result, he added, is a “‘race to the bottom’ in which the most profitable HMOs will be those that deny claims most frequently.”

A recently discovered insurance company memo (pdf) confirms Judge Becker’s insight. This smoking gun, an internal company directive, instructed claims processors to structure “new and existing policies” so as to ensure that they would be subject to Erisa. Once covered by this federal law originally hailed as a landmark safeguard for beneficiaries, the memo forecast, the company could eliminate over 90% of its payouts to claimants seeking redress for denials of coverage.

Immunity for health insurers is just one gift which the supreme court has given to powerful interests that find compliance with the law inconvenient. The most notorious recent example is the 2007 Ledbetter decision, in which the court’s five conservatives held that victims of pay discrimination have only six short months to seek relief – even if they do not learn of the discrimination until years later. But the supreme court has also thwarted Congress’ efforts to protect Americans with disabilities against discrimination (pdf). It has erected unprecedented barriers to patients seeking redress for unlawfully withheld Medicaid benefits, pre-empted state predatory lending (pdf) curbs, and extended lawsuit immunity to the manufacturers of dangerous medical devices. In case after case, the court has achieved de facto repeal of federal guarantees by eliminating citizens’ ability to enforce them in court, and, through pre-emption, secured outright repeal of state law protections.

As the new president rolls out new proposals for ensuring health and economic security, he should not ignore the court’s drive to roll back existing safeguards. If he acts fast, he could score some significant early wins, and send a clear signal that the new sheriff in town is serious about justice for ordinary citizens. Early in this Congressional term, it could be possible to legislatively “fix” decisions that distort major laws like Erisa and the Civil Rights Act equal pay guarantees upended in the Ledbetter case. His agency heads can rescind the mass of Bush administration regulations and policies that pre-empt vital state legal protections. His justice department can press the federal courts to faithfully construe laws in line with their original reformist purposes, and stop importing stealth deregulatory designs recently in vogue. Most important for the long-term, the president, together with allies in the Senate, can sensitise new judicial nominees to the priority of robust enforcement of guarantees protecting Americans’ pocket book needs.

By targeting courts that coddle corporate law-breakers, President Obama can engineer change that will save millions of Americans from major financial, physical, and emotional travail.

Simon Lazarus and Ian Millhiser are attorneys with the National Senior Citizens Law Centre

That said, where do Obama and McCain stand on Tort Reform? I’ve tried to present the information below from the most unbiased sources I can find.

John McCain on Tort Reform

I’ve included some links from traditionally conservative voices. The Club for Growth and an AMA related website. Most of the information is somewhat critical of McCain for not supporting tort reform “enough.” Because of the nature of the primaries, there is plenty of information about McCain and tort reform from conservative sources (most of which didn’t think he was tough enough on tort reform).

From: The Club For Growth:

Tort Reform

The American economy suffers from excessive litigation which increases the cost of doing business and slows economic growth. The Club for Growth supports major reforms to our tort system to restore a more just and less costly balance in tort litigation.

Senator McCain’s record on tort reform is generally positive. These votes include:

• Sponsored the Class Action Fairness Act of 2005 which sought to curb lawsuits by shifting suits from state to federal courts, by requiring judges to review all coupon settlements, and by limiting attorneys’ fees in non-cash settlements^[65]
• Voted for a bill that would bar lawsuits against manufacturers, distributors, dealers and importers of firearms^[66]
• Voted for a bill that would place caps on damage awards in medical malpractice suits against obstetricians and gynecologists^[67]
• Voted for a motion to proceed to a bill that would cap non-economic and punitive damages in medical malpractice suits^[68]

This generally positive record, however, is tarnished by Senator McCain’s sponsoring of and outspoken support for the Patients’ Bill of Rights,^[69] which encouraged an increase in the number of frivolous lawsuits filed against healthcare providers. He also voted against the Litigation Uniform Standards Act, which limited the conduct of securities class actions under state law.^[70]

And for what it is worth, here is a transcript from a Rush Limbaugh Radio Show where Rush refers to the above website in order to assess McCain’s willingness to implement tort reform. Rush seems to agree with the above- McCain has a good start but could do even better on tort reform.

If we assume that what a politician promises in one election they would support in another election, we can go back to 2000 when McCain was running against Bush in the Republican primary. McCain’s website then stated:

“John McCain has been a leading proponent of lawsuit reform at the federal level. He recently authored the Y2K law that will help limit potential frivolous lawsuits resulting from the Y2K computer problem while also protecting the rights of those truly injured to bring a legal action. The bill addresses the needs of businesses that may find themselves as both plaintiff and defendant, by providing incentives to fix Y2K problems, not rush to the courthouse.

“John McCain has and will continue to fight to reform our nation’s product liability laws. He supports reforms that would establish a time limit on liability for most products and cap damages on small businesses. He has also worked to provide liability relief to small businesses by sponsoring legislation that limits punitive damages and eliminates joint liability for non-economic damages for small businesses that employ less than 25 people.

“John McCain also supports small business relief from ‘Superfund’ liability. He believes the law imposes too severe a penalty on small businesses. He supports changing the regulations to limit the liability of small businesses to the amount of pollution they directly caused to a site, and no more.” From Freedom Works

Back to 2007. From a physician website, MedPage Today:

Arizona Sen. John McCain said tort reform is a top priority. He’s supported caps on awards and expressed some support for a loser-pays rule. “We cannot let the search for high-quality care be derailed by frivolous lawsuits and excessive damage awards. … Liability reforms should eliminate lawsuits for doctors [who] follow clinical guidelines and adhere to patient safety protocols.”

McCain laments increased costs stemming from defensive medicine. “In every other industry when technological advances are implemented, costs to the consumer decreases,” he told supporters in South Carolina. “This is not the case in health care. … I can’t tell you the number of tests that all of us in this room have taken just so that doctors won’t be sued for malpractice.”

And while this is not necessarily a “tort reform” issue, McCain supports changes to our health care system which would take most self-funded health insurance plans OUT of ERISA pre-emption.

The senator does suggest he would change current pre-emption provisions in the Employee Retirement Income Security Act, when he says he would “give states the flexibility to, and encourage them to experiment with: alternative forms of access; risk-adjusted payments per episode covered under Medicaid; use of private insurance in Medicaid; alternative insurance policies and insurance providers; and, different licensing schemes for medical providers.”

ERISA adjustment is also implied by his call to “build genuine national markets by permitting providers to practice nationwide” and his proposal to “allow individuals to purchase health insurance nationwide, across state lines, to maximize their choices.”Obviously, in North Carolina, taking self funded health plans out of ERISA would have a “pro-plaintiff” benefit because self-insured entities would be subject to NC’s anti-subrogation rule. Clearly, this is an unintended consequence for our state.

Finally, according to AllBusiness.com, McCain has publicly lamented increased costs stemming from so called defensive medicine, where doctors allegedly over-cautiously order multiple tests in the hopes of avoiding any mistakes or liability. “In every other industry when technological advances are implemented, costs to the consumer decreases,” he told supporters in South Carolina. “This is not the case in health care…. I can’t tell you the number of tests that all of us in this room have taken just so that doctors won’t be sued for malpractice.”

Barack Obama on Tort Reform

As a lawyer and constitutional law expert, Obama has spoken favorably of civil litigators at times, but has also been noted in the press to be somewhat more critical of “trial lawyers.” While campaigning for the Senate in Illinois years ago, he said, “Anyone who denies there’s a crisis with medical malpractice is probably a trial lawyer.” [Unsubstantiated info ahead] Furthermore, it has been noted that Obama voted in favor of caps on non-economic damages in medical malpractice cases when he served in the Illinois General Assembly. [NOTE: I pulled this quote from a business website doing a neutral review of the tort reform stances of the candidates. It was old (pre-nomination) and fairly balanced. Of course, there was no reference in the article. I’ve been questioned on this now, so I’m trying to verify the so-called votes. Frankly, I was suprised that Obama would vote for any type of cap given his Constitutional experience, so this could be my bad reporting compounding someone else’s bad reporting. Good thing I’m not a reporter!]

In 2005, Barack Obama voted for CAFA, the Class Action Fairness Act of 2005. Who voted against it? Hillary Clinton, Dick Durbin, Ted Kennedy, Pat Leahy, Joe Biden, Barbara Boxer and other progressive Democrats. The Class Action Fairness Act was strongly supported by business groups like the US Chamber of Commerce.

The ABA describes CAFA in this way:

In a nutshell, the Class Action Fairness Act has two principal parts. One set of provisions establishes new procedural and substantive standards applicable to class action settlements. Some of these merely duplicate (or add little to) existing practice under the Federal Rules of Civil Procedure, but others — such as new limitations on attorneys’ fees in coupon settlements and requirements that government officials be notified whenever a class action settles — are brand new.

In addition to the CAFA bill, Obama has taken a position on medical malpractice tort reform which focuses on improvements in patient care and lower error rates. In fact, Obama and Hillary Clinton co-authored an article in the May 25, 2006 issue of the New England Journal of Medicine, entitled “Making Patient Safety the Centerpiece of Medical Liability Reform.“

In conjunction with the publication of their article, Obama and Clinton introduced and co-sponsored the National Medical Error Disclosure and Compensation (MEDiC) Act of 2005, a bill that, in part, would have required hospitals to disclose errors to patients and would have also created a national patient safety database. The bill further proposed to create a Department of Health and Human Services program that would seek early compensation for patients and offer liability protections to doctors in exchange for their disclosure of errors and apologies. This legislation was never realized and died in 2006.

The Last Frontier: The Supreme Court of the United States

Other than the candidate platforms and positions, many would argue that the real “tort reform” is accomplished by appointing Judges who will take “tort reform” positions on legal cases. Justice John Paul Stevens (88 years old) and Justice Ruth Bader Ginsburg (74 years old), are both considered to be left leaning and potentially ready to retire in the next four years.

About the Supreme Court, Obama has said in a July 7, 2007 speech “We need somebody who’s got the heart, the empathy, to recognize what it’s like to be a young teenage mom. The empathy to understand what it’s like to be poor, or African-American, or gay, or disabled, or old. And that’s the criteria by which I’m going to be selecting my judges.”

McCain has said, “I tell you I will nominate only people who have a clear, complete adherence to the Constitution of the United States and do not legislate from the bench. That’s who I’ll nominate to the U.S. Supreme Court.”

This article will not attempt to futher address the issue of Supreme Court appointments, though obviously the candidates would presumably appoint Judges who agree with their general philosophy on the law. Whether that position is “pro-consumer” or “tort reform” will be for the reader to decide.

I’ll update this article as I find more information. Obviously, John McCain has a long voting record, so there can be much more analysis of his voting positions than of Obama. I may also try to take a look at the positions taken by Biden and Palin, although, again, Biden will have a much deeper record than Palin.

—-Chris Nichols

Nichols Law Firm